Hulu Has Failed In Europe Because It Wanted To Own Ad Sales, RTL CEO Says

The RTL chief executive, Gerhard Zeiler, said on Thursday the broadcaster had not done a deal with Hulu, the online TV service, because its US owners would not allow the company to sell its own advertising.

Zeiler told the Royal Television Society Cambridge Convention that aggregators such as Hulu, which is owned by US media companies News Corporation (NSDQ: NWS), NBC (NSDQ: CMCSA) Universal, Disney (NYSE: DIS) and private equity company Providence Equity Partners, would fail unless they allow broadcasters to promote their channels rather than individual programmes on their video-on-demand service. Hulu is yet to launch in Europe.

“Two years ago Hulu came to Europe and after two years they have not done any deal because all the broadcasters have said ‘we won’t let you turn our [advertising] euros or pounds into cents’,” Zeiler said.

“We said, ‘we want to sell our own advertising, we want to determine the price’ and that’s not something they [Hulu] could to deliver to us.

“We can’t allow someone else to disintermediate. In a universe with one thousand different choices you need guidance.”

He added that channel brands are more vital then ever in a multichannel environment, where new distribution platforms such as internet TV are taking root. RTL, the former owner of Channel 5 in the UK, is Europe’s largest advertiser-funded commercial broadcaster, with 41 TV networks and 31 radio stations in 10 countries. “We need to strengthen our megabrands,” Zeiler said. “When we change programmes from one channel to the other in the same time slot it’s a completely different audience.”

He also expressed scepticism about the popularity of internet TV. “A lot of the people who buy connected TVs will not connnect them,” he said. “The normal user uses seven to 10 channels. They will use the TV set in 10 years mostly to watch TV.”

Speaking during the same session about internet TV, Linda Summers, director of product marketing at web phone and video communications service Skype, said broadcasters should follow its example and embrace new platforms.

“Reach is really important”, she said. “It’s down to you … to monetise it.” Skype now has 700 million users worldwide, Summers added.